Institutionalizing Fear in the Workplace: The Impact of Anemic Retaliation Protections

By Daiquiri J. Steele, Assistant Professor of Law

On February 3, 2023, a Norfolk Southern train carrying toxic substances derailed in Ohio, about a quarter of a mile west of the border between Ohio and Pennsylvania. The derailment led to the release of hazardous substances into the air, soil, and water in the surrounding area. The environmental hazards coupled with the threat of possible explosion from a wreckage that burned for more than two days following the derailment prompted evacuation orders for residents on both sides of the border. Though the final report likely will not be released until next year, the Chair of the National Transportation Safety Board characterized the derailment as “100 percent preventable,” and expressed concerns about safety.

In the wake of the accident, regulators have vowed action. However, like many other industries, the railroad industry has been plagued by a pattern of retaliation against employees who report safety concerns. The stories of retaliation abound. In 2011, one worker reported safety concerns to the Federal Railroad Administration triggering an investigation that uncovered 357 defects. He was ultimately fired in retaliation for making the report and was not able to recover until almost a decade later in 2018 when he was awarded $1.25 million in damages for the retaliation. Another worker was blocked from promotion and ultimately fired for reporting broken railcar wheels. The experience of these workers seems to be the rule, not the exception, as retaliation in the workplace is pervasive for workers who report numerous types of wrongdoing, including wage theft, pension theft, occupational safety concerns, violations of parental and medical leave laws, transportation safety, food safety, every type of illegal discrimination, and so many others across a myriad of industries, many of which are already regulated.

The Impact of Ineffective Retaliation Protections

Enforcement is a critical component of any regulatory scheme. Anti-retaliation provisions are a mechanism Congress uses to ensure effective enforcement of the law. These provisions protect employees from retaliation for reporting violations of various laws, including antidiscrimination, wage and hour, employee benefits, environmental, tax, securities, anti-money laundering, and many other laws. Fear of retaliation is the primary reason why workers do not report employer misconduct. However, reporting non-compliance in hopes of bringing about a change (i.e., whistleblowing) is socially desirable behavior. This behavior is particularly important given how much the government and the public rely on employees to uncover noncompliance issues. My research examines whether and how anti-retaliation and whistleblower laws provide effective retaliation protections and the effects of diluted retaliation safeguards on the workplace and society at large.

Understanding the centrality of effective retaliation protections to any workplace regulatory scheme, Congress inserted anti-retaliation provisions into labor and employment statutes, as well as other statutes where effective enforcement would hinge on employee reporting. For over half a century, the judiciary’s decisions regarding anti-retaliation statutory provisions reflected a comprehension of the importance of having robust protections against retaliation. The U.S. Supreme Court routinely ruled in favor of broad retaliation protections. Examples include holding that retaliation protections cover third parties and former employees, adverse actions need not be employment related to be actionable, and that participation in internal investigations constitutes protected activity. The Court has even found implied retaliation prohibitions in statutes where there was no explicit mention of retaliation in the statutory language.

However, in the wake of an increase in the number of retaliation claims being filed, the courts have started issuing restrictive interpretations of antiretaliation provisions in workplace laws. Examples include requiring employeeplaintiffs to prove a heightened causation standard; finding that employer conduct like changing work schedules, fabricating negative employment appraisals, and threatening employees with negative personnel actions do not constitute adverse action; and narrowing the amount of time between the protected activity and the adverse action needed to show temporal proximity. Such interpretations weaken effective enforcement of anti-retaliation laws and can lower the costs to employers associated with retributory behavior, thereby incentivizing it.

Diluting Retaliation Protections

The rationales courts are using to dilute retaliation protections can be divided into two overarching categories. The first category deals with the “plain meaning” of the statutory language. Anti-retaliation provisions exist in numerous statutes, and the language of these provisions vary from one statute to another. These linguistic variations, no matter how slight, can lead to drastic differences in interpretation of retaliation protections among statutes and, in some instances, differences from one type of retaliation claim to the next within the same statute. This rigid interpretation can impede the purpose of the retaliation protections, particularly considering some of the relevant statutes were passed within the last year (e.g., the Pregnant Workers Fairness Act of 2022) and others were passed nearly 100 years ago (e.g, the Railway Labor Act of 1926). The second category involves floodgates concerns. Given the large number of retaliation claims that are filed with administrative agencies, some courts are concerned that a failure to issue restrictive interpretations of retaliation claims would lead to a flood of litigation. This reasoning is being used despite the fact that retaliation claims generally are found to have more merit than many other types of workplace claims. In other words, some courts are effectively weakening retaliation protections because too many people need them.

Anemic enforcement of anti-retaliation laws can have numerous, negative consequences. Some of the primary motivations for employers to retaliate against employees include discrediting the employees who reported, punishing the employees who reported, and deterring other employees from reporting. Additionally, female workers and workers of color are more likely to be retaliated against for reporting workplace misconduct than other workers who make the same or similar reports. That women and people of color are disproportionately targeted for retaliatory behavior suggests that bias itself may motivate retaliation. However, the common thread with retaliation is a desire to instill a fear of reporting misconduct. If employees fear economic retribution for reporting employer wrongdoing, countless noncompliance issues can go undetected and uncorrected.

Female workers and workers of color are more likely to be retaliated against for reporting workplace misconduct than other workers who make the same or similar reports. That women and people of color are disproportionately targeted for retaliatory behavior suggests that bias itself may motivate retaliation.

Non-compliance with workplace laws can have numerous consequences that negatively affect several groups— workers, compliant employers, business partners of employers, regulators, and society at large. For example, suppose a company is operating in violation of food safety laws, and an employee of that company reports the violation. After learning of the employee’s report, the company terminates that individual’s employment in retaliation for reporting the food safety non-compliance. If that retaliation were to go unremedied, it would likely deter other employees at the company who are witnessing violations of food safety (or other) laws from reporting. Additionally, the company’s competitors who are complying with food safety regulations would be at a disadvantage in the marketplace if the company were to operate with much lower costs because it is saving money by not complying. Regulators would be impacted, as the purpose for which the food safety laws were created would be thwarted, and customers who consume the food may be harmed due to the violations. Additionally, the worker who would otherwise be gainfully employed absent the unlawful retaliatory actions of the company would no longer be employed and may need public assistance, at least for a limited time, as a result.

Though employee retaliation claims are typically viewed as purely private disputes where only the employee and the employer are the relevant stakeholders, retaliation also reaches the public sphere. However, the implications for other stakeholders like clients, customers, business partners, taxpayers, and the general public are frequently discounted. Moreover, the norms that are considered when contemplating behavior that affects the public sphere are often disregarded in retaliation cases. These norms include economic security, civil rights, public health and safety, and protection of the public treasury. The importance of retaliation protections and the seemingly sudden shift in the judiciary’s approach to them is signaling that it may be time consider reforming retaliation protections.